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Donald Trump is the President-Elect, Tech Under Trump, The Big Picture


Wednesday, November 9, 2016 – blog post / forum thread

Good morning,

Today's update is far more political than it is technical; then again, one of the core tenets of Stratechery is that those two arenas are far more interconnected than many people in the industry appreciate.

Donald Trump is the President-Elect

I am shocked, but not surprised, for three reasons:

  • First, Trump's rise in the primaries, in particular the resonance of the immigration issue, was not a surprise to me at all. I discussed on The Ezra Klein Show (that link jumps to the relevant segment) how familiar I was with that sentiment both thanks to my background in small-town Wisconsin and particularly my experience working on a political campaign.
  • Second, I wrote in March about how the demise of media's traditional gatekeeper role was inextricably tied to the demise of gatekeepers generally; the issue is not that the media made — or failed to stop — Trump, it's that a figure like Trump couldn't have even entered the conversation before the Internet. I'm biased, but I think piece — The Voters Decide — is well worth a re-read.

Before I get to the third point, I want to make a brief aside: without question racism and sexism played a major role in this campaign, and one of the truly shameful outcomes of this election is the change in norms it represents; while Trump may very well do significant damage to the economy or especially geopolitics, the real pain for many people is going to be felt in the day-to-day life of non-white males.

I think, though, that to reduce Trump's election to nothing more than racism and sexism isn't quite right; it's a way of avoiding the self-examination that many people, including the tech industry and yours truly, absolutely must undergo, and that leads to the third reason I am not surprised:

  • People feel the system is unfair, that they don't have a stake in it, and they are exceptionally mad. This is a sentiment that has been rising for decades thanks to globalization and the increase in manufacturing productivity that devastated so much of the Midwest in particular (and that I documented in The Brexit Possibility), but it was dramatically accelerated by the aftermath of the Great Recession when, in the estimation of people where I grew up, Wall Street got off scot-free while everyone else had to bear the pain. I cannot overstate how pervasive and deeply-felt this sentiment is: so many people I know — regardless of income level — deeply believe the system is rigged, so who cares if Trump destroys the whole thing?

Again, I am not minimizing in the slightest the role racism and sexism played; as many have observed African Americans and Latinos, who suffered even more in the Great Recession, supported Hillary Clinton by large majorities. And, as is frightfully clear, there are a disturbing number of voters for whom race and sex are primary drivers. To that end, though, minority populations felt much more acutely what they had to lose under a Trump presidency; ironically, the people who decry talks of "privilege" as political correctness demonstrated their privilege in the most extreme way possible: Why not blow it up? The whole system is rotten anyways.

The reason I both acknowledge the impact of racism and sexism and yet push back on the idea they are the only causes of this result is to caution the readers of this update to not take the easy way out: reducing any event to something so black-and-white as "white people are racist" and "men are chauvinist" is to absolve oneself of any responsibility. After all, I'm not racist or sexist.

In fact, though, the tech industry treats the typical Trump voter — overtly racist and misogynistic or not — with contempt. Just look at the entire digital advertising industry: its entire premise is based on the assumption that people are too dumb to care about their privacy being violated, which means there is an arbitrage opportunity in selling personal information for more than it costs to provide whatever service or publication is drawing said user. Who cares about doing what is right, if it's legal it's A-OK!

You can apply the exact same criticism to the tax avoidance policies that every tech company engages in, including — especially — Apple. It is difficult to imagine a starker example of behavior that is justified by being legally acceptable even as it is morally dubious. It is behavior sounds an awful lot like the Wall Street bankers that so many Americans despise: actions are justified by their legality, not by their morality. We sit here and decry how Trump has decimated the norms of political campaigns, even as we violate norms as long as it benefits the bottom line.

More broadly, the reality is that, almost by definition, every single person reading this newsletter is a winner in the age of the Internet. You have the luxury of paying $100/year for updates about the business and strategy of tech, because you work for a business that has a stake in the future. We all have the luxury of considering the aggregate gains from trade, or the sophistication to appreciate why banks needed to be bailed out while individual mortgage holders didn't. And we can perfectly articulate why Trump's policies — whatever they might end up being — will probably not benefit his voters.

Most people don't have that luxury: they are busy living their lives, trying to make do, and all they know is their mortgage is underwater while not a single person on Wall Street is in prison, and one of the two candidates was rich from Wall Street fees. Again, I'm not saying this opinion is right or that there isn't real privilege at play — and yes, I know that Trump supporters are by and large not poor — but politics — indeed, nothing in life — is not about an objective reality, but about how that reality is perceived.

And when it comes to reality, the fact of the matter is that the tech industry is predicated on inequality. The entire idea is to build scalable processes that massively increase efficiency and disrupt old-world businesses by making it up in volume. Where we have failed miserably as an industry is coming up with solutions for — or, to be more precise, giving the slightest hint of a damn about — the individuals lost along the way. Individuals who are primarily rural, primarily Midwestern, and who overwhelmingly showed up — as opposed to most demographics who didn't — to elect Donald Trump president.

Tech Under Trump

So what now? Honestly, I don't know. One of the biggest questions about a Trump presidency is whether or not Peter Thiel was right when he stated before the election:

I think one thing that should be distinguished here is that the media always has taken Trump literally. It never takes him seriously, but it always takes him literally. I think a lot of the voters who vote for Trump take Trump seriously but not literally.

I think Thiel is probably more right than wrong; Trump doesn't seem particularly interested in details or in learning, generally, even as he is dangerously interested in how he is perceived and portrayed; to that end the greater danger seems to be more his being an idiot with a grudge than being an ideologue with an agenda.

Certainly the tech industry should be rooting against literalism: not only has Trump attacked companies directly, particularly Amazon because of Jeff Bezos' ownership of the Washington Post, as well as Apple for manufacturing abroad, but his trade rhetoric taken to its logical conclusion will hurt Silicon Valley more than almost anyone else. The reality of being predicated on scale is that for nearly every tech company the United States is but one market of many, meaning any sort of trade war will be felt in tech first. The presumably imminent repeal of Obamacare will also hurt the gig economy specifically and, sadly, entrepreneurship broadly: being an independent contractor is a lot more viable when you have health insurance.

And, of course, there are the geopolitical concerns I hinted at above; I'm anything but objective on this point given I live in Taiwan, the absorption of which is at the very top of the list when it comes to China's foreign policy. Twenty years ago President Bill Clinton sailed a carrier group through the Taiwan Strait in response to China having fired missiles off the coast of Taiwan; it was a reminder of the U.S.'s commitment to Taiwan's defense specifically and determination to be the dominant power in the Pacific generally. It's hard to imagine those commitments being upheld given Trump's rhetoric, and any sort of conflict in the region would be devastating for the hardware side of the industry; remember, even the cloud services have to buy their servers from somewhere!

The biggest issue of all, though, is the political viability of an industry that employs far fewer people than it puts out of work. Yes, in the long run, the gains from technology will make everyone richer, but the mechanism by which those riches are distributed by default heavily favor the few. Presidential elections, on the other hand, are about the majority (or, to be more precise, the majority of electoral votes, which weakens the coast-concentrated tech industry's influence even further). To that end it is critical that the industry take the political process far more seriously, and, by extension, understand and accept the importance of coalition building, even if that means compromise. It would be far better to give up some issues willingly — I'd start with tax rates and breaks — than to be the target of a populist movement determined to exact revenge.

The Big Picture

Stepping back to the big picture, after Brexit I wrote The Brexit Possibility, which laid out how the post World War II compact between the government, corporations, and labor had mostly fallen apart; my optimistic spin was that things needed to change, and maybe the silver lining of Brexit would be the chance to build something new for the new world order. Unfortunately, with all due respect to my readers in the United Kingdom, it is much harder for me to summon a similar level of optimism about Trump, particularly given the geopolitical issues raised above; still, the fact remains that our politics are organized around a view of the world that is obsolete.

To that end, the fact a figure like Trump won despite the system certainly suggests change is afoot. It should be noted that this election could very easily be characterized as a Republican wave election — the party held the House, Senate, and increased its share of governorships, and in many states Trump was a drag on the ticket — but Trump certainly has no particular loyalty to the party. In his acceptance speech he promised an investment in infrastructure as his first priority, an idea that is more popular amongst Democrats than Republicans. Might this be the beginning of a real realignment in U.S. politics? If so it is even more incumbent on the everyone in tech — both individuals and companies — to take an approach to the political process that is driven by something deeper than short-term self interest, even if that means dealing with its messy and decidedly non-binary reality; as long as there are people humanities will always have the final say.

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